Day Traders Diary

12/27/16

 The stock market enjoyed a modest post-holiday advance, which was paced by the Nasdaq Composite (+0.5%). The tech-heavy index settled ahead of the S&P 500 (+0.2%) while the Dow Jones Industrial Average (+0.1%) ended just above its flat line.

The bulk of today's action took place during the opening minutes as the key indices charged to session highs. The opening rally was followed by a slow intraday drip from those highs. The Dow surrendered the bulk of its early gain while the S&P 500 and Nasdaq spent the afternoon near the middle of their respective ranges. Unsurprisingly, participation was very limited with fewer than 600 million shares changing hands at the NYSE floor.

Nine of eleven sectors finished the day in positive territory with technology (+0.5%) underpinning things from the start. The top-weighted group rallied behind Apple (AAPL 117.25, +0.73) and high-beta chipmakers. NVIDIA (NVDA 117.32, +7.54) soared 6.9%, extending its 2016 gain to 256.0%. The broader PHLX Semiconductor Index climbed 1.2%.

The technology sector lost the top spot to materials (+0.5%) during the final minutes while the consumer discretionary sector (+0.4%) also provided support. The influential discretionary sector was boosted by Amazon (AMZN 771.40, +10.81) after the online retail giant made upbeat comments about holiday sales of its devices. Apparel retailers were mixed while the SPDR S&P Retail ETF (XRT 44.91, +0.43) gained 1.0%.

Other cyclical sectors recorded slimmer gains with energy (+0.2%) failing to keep pace with crude oil, which jumped 1.7% to $53.89/bbl. Elsewhere, the financial sector (+0.1%) spent the entire session behind the broader market. Deutsche Bank (DB 18.37, -0.26) was notified by the European Central Bank that it will have to maintain a phase-in Common Equity Tier 1 ratio of at least 9.51% starting in January. This will be down from this year's requirement of 10.76%.

Biotechnology displayed broad strength at the start, but the iShares Nasdaq Biotechnology ETF (IBB 271.26, -1.06) ended lower by 0.4%. Biogen (BIIB 290.97, +3.44) fueled the opening strength, advancing 1.2%, after the company's spinal muscular atrophy treatment was approved by the Food and Drug Administration.

Treasuries slipped in morning action and spent the afternoon near their lows. The 10-yr yield rose two basis points to 2.56%.

Economic data was limited to Consumer Confidence and Case-Shiller 20-city Index:

The Conference Board's Consumer Confidence Index surged to 113.7 in December (Briefing.com consensus 109.8) from an upwardly revised 109.4 (from 107.1) in November

December marked the highest reading for the index since August 2001

The uptick was driven entirely by the Expectations Index, which increased from 94.4 to 105.5

The Present Situation Index decreased from 132.0 to 126.1

The Case-Shiller 20-city Index for October increased 5.1% to follow last month's revised increase of 5.0% (from 5.1%)

Tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET while November Pending Home Sales will be reported at 10:00 ET.

Russell 2000 +21.4% YTD

Dow Jones Industrial Average +14.5% YTD

S&P 500 +11.0% YTD

Nasdaq Composite +9.6% YTD